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Goldman Sachs unveils Amazon-backed cloud service for Wall Street trading firms

David Solomon, chief executive officer of Goldman Sachs & Co., listens during the Milken Institute Global Conference in Beverly Hills, California, U.S., on Monday, April 29, 2019.

Kyle Grillot | Bloomberg | Getty Images

Goldman SachsCloud computing is a business opportunity.

In an offer designed to assist hedge funds and asset manager, the bank will make available its market data as well as software tools. AmazonCNBC is the exclusive source of information about CNBC’s cloud division.

According to the executives of both firms, this move is the outcome of two years of collaboration with AWS. It places Goldman, 152, in an unusual situation of providing cloud services for Wall Street. It is part of Goldman CEO David SolomonThe push by the firm to make technology more accessible to clients has driven the firm’s performance this year.

Solomon said last week that clients of the company will have access to decades-old experience in data aggregation and speed, which should allow them to make better business decisions. We believe that this will enhance our market leadership.”

The companies claim that the new service called GS Financial Cloud for Data and Amazon Web Services will allow asset managers to save time. Instead of spending their time wrangling data sets or relying on legacy software to analyze them all, developers can focus on trading. Goldman also stated that the service will lower barriers for companies to access advanced trading methods.  

According to Goldman’s co-chief information officer, the industry struggles to meet the technological requirements of new investment methods. Marco Argenti. In the past decade, quantitative trading businesses have grown in popularity. They have taken over assets from traditional hedge-fund managers Leon Cooperman and John Paulson. closedTo outside investors

Argenti stated that it could take several months for a hedge fund client to calculate the correlation of currency exchange rates and stocks. The analysis is done by using data feeds and analytical tools provided by Goldman.

Argenti explained that “if it existed, we’d have used it.” However, it was impossible to find a comparable product on the market. You only need to assemble and integrate the interface with your application. The rest is done for you.

‘Working backwards’

Product description This was revealed Tuesday at AWS Re:Invent conferenceLas Vegas is the latest example of unusually strong ties between tech giants and leading Wall Street firms.

This relationship started more than 10 years ago, when Goldman moved some of its computing workloads to the cloud. Adam SelipskyHe was a former head of AWS at Amazon earlier in the year.

This has been a successful relationship. Goldman relied on AWS for its rapid growth. Marcus cThe 2016 edition of the onsumer financing business and its prospects Apple CardThree years later, operations continued. Goldman Sachs continued to operate three years later. extends loansAmazon sellers advisedAmazon announces its 2017 acquisition by Whole Foods.

Selipsky stated that Goldman, during discussions with the firms, was interested in understanding how Amazon took computing services created by itself initially and made them available to Amazon. The companies claim that Project Alexandria was referred to by Goldman developers. Amazon showed Goldman one technique: “Working backwards,” which is when the tech titan creates FAQs and a press release to inform managers about its importance.

Selipsky stated that many customers have asked him to assist them in doing what Amazon did with AWS. The ideas for collaborating quickly emerged when we first started to talk about Goldman’s abilities around data and about analytics in financial services.

Amazon is the pioneer of cloud computing. This allows businesses to lease computing power, as well as a range of other services, instead of having their own server farms. This has enabled companies to accelerate their software development cycles and help them keep up with changing consumer demand. AWS accounts now for approximately lion’s shareAmazon’s operating profits.

‘Explosively beneficial’

Amazon has been partnering with sector leaders to develop industry-specific cloud services. This includes manufacturing, life science, and health. Amazon has partnered with VolkswagenCreate an industrial cloud platformIt will help move 124 factories onto a single platform.

Selipsky explained that Goldman is more than a bank and financial services provider. “If you look back, Goldman has become a software business.” We’ve been operating as a software business for many years. Our goal is to make the Amazon platform more accessible to its customers.

Although the executives refused to discuss how Goldman and AWS will share the revenue, Solomon said to CNBC that it was a way for Solomon to strengthen the firm’s relationship with traders. He said that Goldman intends to make the service profitable through trading opportunities and financing.

Solomon explained that “this is something which enhances the experience for our institutional clients” and provides them with access to our data. The way they get paid is that we receive more of their wallet shares because our overall experience and the services that we provide give us more mindshare, greater opportunities to trade and finance them.

Mike Robinson
Mike covers the financial, utilities and biotechnology sectors for Street Register. He has been writing about investment and personal finance topics for almost 12 years. Mike has an MBA in Finance from Wake Forest University.